Fed

Wednesday

James T. Fishback

Trump should have the power to fire the Fed chair

The Chair of the Federal Reserve is arguably the most powerful economic official in the United States. He’s also the least accountable. He sets borrowing costs for households and businesses, opens lending windows to banks deemed “too big to fail,” and decides when to tame or ignite inflationary forces. Unlike the Treasury Secretary or even the President himself, he answers to no one. That may soon change. In Trump v. Wilcox, the Supreme Court is weighing whether the President should be allowed to remove the head of an independent agency.

Fed

Monday

Taylor Millard

What does the Fed’s interest rate hike mean?

The Federal Reserve raised interest rates by 0.25 percent last week, the first increase since December 2018. Back then, Donald Trump had been very vocal in his criticisms of the Fed and its chair Jerome Powell, demanding no more rate increases. There was no resistance from the White House this time with press secretary Jen Psaki saying that the Biden administration respected the Fed’s independence. Powell called the rate increase necessary due to inflation coupled with rising prices. “As we emphasize in our policy statement, with appropriate firming in the stance of monetary policy, we expect inflation to return to 2 percent while the labor market remains strong,” said Powell, before warning that it will take longer than expected for inflation to sink.

interest inflation

Friday

Taylor Millard

The Federal Reserve is still political

President Joe Biden’s re-nomination of Jerome Powell as Federal Reserve chairman came as no surprise to financial analysts. Powell remained the most likely candidate given his ability to schmooze and glad-hand with politicians within and outside the administration. He earned the title of “best bureaucrat in Washington, DC” by receiving endorsements from both National Review and the American Prospect despite their divergent policy views. A corresponding vote in the Senate seems preordained, unless Massachusetts Senator Elizabeth Warren gets her way and forces a new pick. “Reappointing Powell is the safest route here,” the Cato Institute’s Norbert Michel told me in an email after Powell’s nomination on Monday.